Haynes v. Short

McCLELLAN, J. A mercantile partnership was formed as of February 1,1870, by and between the appellant, defendant below, and appellees’ intestate, L. M. Burney, to continue three years from that date. It did in fact continue until 1884, or 1885, when it was dissolved by mutual consent. The articles of copartnership stipulated, that Burney should furnish three thousand dollars, more or less, to be used in, and to constitute the capital of the business, and upon which no interest was to be charged. Haynes was to contribute his services, and devote his time and energies to the conduct of the business, as against the money furnished by Burney. They were to share equally in the net profits. Burney did furnish $3,500 in compliance with the articles, and the enterprise was carried on by Haynes until the dissolution before mentioned. The clear implication from the contract of copartnership is, that Burney should be reimbursed, on dissolution, for the capital which he had put in the business, and that the use of the money in the joint venture should be considered an equivalent for the personal services of Haynes. Dissolution not having taken place at the end of three years, the stipulation of the articles to that effect will be regarded as entirely omitted (Boyd v. Mynatt, 4 Ala. 79), and the partnership be held to have continued to the time of actual dissolution in accordance with the terms of the original agreement, pretermitting its expressed limitation. — Ooll [565] yer on Partnership, § 214; 1 Lindley on Partnership, p. 158 (*122); Mifflin v. Smith, 17 Serg. & R. (Pa.) 165; Robbins v. Luswell, 17 Ill. 365. The partnership having thus continued until 1884, or 1885, a bill for its settlement is timely, if filed within six years from the actual dissolution, or credit or other like partnership transaction on account between the partners, from which a promise on the part of the defendant to pay the balance found against him on final settlement may be implied—Bradford v. Spyker, 32 Ala. 134; Brewer v. Browne, 68 Ala. 210; Wells v. Brown, 83 Ala. 161. It follows that the present bill is not open to the objections urged against it by the second, third, and fourth assignments of demurrer. The first ground of demurrer was properly overruled. The bill, in our opinion, presents a cause of action which is only cognizable by a court of equity. It is true, that cause of action is very imperfectly presented, and the bill is lacking in many material allegations, as we shall presently see, but enough appears to demonstrate that the complainants have no adequate remedy at law. It is averred that the partnership has not been fully settled; that no adjustment of the expenses of the concern has been made; that the defendant has the assets of the partnership, including its capital paid in by Burney, and refuses to pay the same to complainants. The purpose of the bill is to have the amount of said capital, with interest from dissolution, decreed to complainants, out of the assets in defendant’s hands. Unless there had been a settlement between the partners, and a balance struck, charging defendant with the sum now claimed, all of which the bill negatives, the complainants would have no right of action against defendant individually. On the contrary, their claim would be against the partnership assets, and a suit at law could not be maintained, because it would involve a proceeding by Burney, as represented by his administrators, against Burney, as represented by his surviving partner.—Robinson v. Bullock, 58 Ala. 618; Morrow v. Riley, 15 Ala. 710. Moreover, the complainants are entitled to recover the sum paid in by their intestate, or any part thereof, only upon a contingency, which depends entirely upon the state of the partnership accounts. The debts of the concern, and expenses of carrying it on, are first to be paid. The assets remaining would then be subject to a further reduction, to the extent of any excess beyond one-half of the net profits re [566] ceived by Burney. "Whatever of the assets then remained, would be applied to the reimbursement of Burney for the money paid in by him, whether the amount remaining was equal to the whole capital with interest, or only a part of it. And finally, should there still be a balance, it would belong in equal parts to complainants and the defendant, as net profits. It is therefore a pre-requisite to complainants’ recovery, that an account and settlement of the partnership should be had; and to the taking of such an account the powers of a court of equity are alone adequate.—Calvert v. Marlow, 6 Ala. 307; Broda v. Greenwald, 66 Ala. 538. The bill, as we have said, is defective. It is faulty both in averment and prayer. It fails to state sufficiently facts which would authorize relief, and it fails to pray for the only relief which can be granted, when the purpose on the part of one partner is to bring the other to a settlement of the joint affairs. It fails to aver approximately the amount of the partnership debts, or that there are no debts. It should have averred the amount of the profits, and expenses of the business, as nearly as practicable, to what extent there had been a division of the profits, what each had received, and what remained to be divided. The relief sought is entirely inappropriate. The prayer should have been for the settlement of the whole partnership, not for a settlement of one item that entered into the partnership account. — Russell v. Byran, 2 Cal. 86; Williamson v. Haycock, 11 Iowa, 40; Pope v. Salsman, 35 Mo. 362; Glover v. Hembree, 82 Ala. 324. There is no demurrer which goes to these several defects of the bill, or to any one of them. They may be cured by amendment, and the bill perfected. On a motion to dismiss for want of equity, the bill will be considered as if it had already been amended in all particulars in which amendments are proper. So viewed, this bill contains equity, and the motion to dismiss was properly denied.—Seals v. Robinson, 75 Ala. 363; Hooper v. S. & M. R. R. Co., 69 Ala. 529; Cahalan v. Moore, 66 Ala. 303; Glover v. Hembree, supra. We discover no error in the rulings of the chancellor, and the decree is affirmed.